S&P Lowers Jamaica Outlook

S&P has cut Jamaica’s outlook from stable to negative, it says, as liquidity concerns complicate its debt obligations. “The country’s reliance on external funding for its sizeable fiscal and external deficits is becoming more problematic because of deteriorating global economic and financial conditions,” the agency says. The B rated sovereign successfully raised half of the external amortizations due this fiscal year, the agency notes, and enough to cover a bullet payment in February 2009 on its EUR200m 10.5% bond. It is also hammering out some $600m in loans over 3 years from the IDB, which could be as much as $1bn over 5 years. S&P notes that if Jamaica gets through this difficult period without significant loss of reserves, and the current account deficit adjusts in an orderly manner, the outlook could be revised back to stable. Jamaica sold $350m of 8.0% 2019 bonds in June.